Authorities say Gusev ran Spamit, the shady affiliate organization that paid spammers to promote the infamous Canadian Pharamacy ring of websites. These sites claimed to offer popular prescription drugs at bargain basement prices and without the need for a prescription. Those that placed orders through one of the websites received fake versions of the drugs they’d ordered. These counterfeits are produced in countries such as India and China and are not subjected to any type of regulation or inspection. While there are no reports of death or serious illness related to the drugs, the FDA was still concerned enough to issue a nationwide alert warning consumers to stay away from such sites.

Last month Spamit abruptly ceased operations citing increased attention on their operations as the reason. Gusev, who authorities believe has fled Russian and is on the run, is said to have raked in over $120 million over the last 3 years. While his location remains a mystery he did give a statement to a website called gzt.ru.

          “I am not the biggest spammer because I do not do spam. Moreover, I have never done it,” he said. “I do not have infected computers, I do not have networks of zombie computers (botnets), and I can not send spam by e-mail.”

Spamit is believed to have used the Storm, Conficker and Waledec botnets to pump out their spam. Since it was shut down worldwide spam volumes have dipped sharply but are expected to rebound once the members of the Spamit program join up with a new one and resume operations.

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Russian Spam King Arrested

          “Virus scanning has to extend beyond the PC to all types of removable storage”, Jason Holloway, Northern European sales manager with SanDisk said .”Better still, employees should only be able to use authorised flash drives that include on-board antivirus scanning. This ensures that users cant turn off, disable or work around the protection, and would stop these infections from spreading.”

Conficker has spread like wildfire across the net and has infected over 7 million computers. It was first spotted in 2008. Experts still aren’t sure what its purpose is since its botnet is seldom used.

A year ago Manchester council’s computers were attacked by Conficker, forcing the town to write off parking tickets and spend over $1 million pounds to fix the infection. It’s not yet known if the Manchester police will have to overlook any violations or void any arrests because of their infection.

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Conficker Worm Cripples Police Department

The fake antivirus programs are known as scareware because of their technique of performing a fake antivirus scan on the computer, scaring the user by alerting them to virus infections that don’t really exist, and then offering to sell the victim software to remove the non-existent infections and protect from them in future.

The victim gives up credit card details for software ranging from $30 up to $100, but the real outcome is that their computer falls under the control of the spammer to grow their botnet.

Security analysts estimate that many tens of millions of computers have been taken over by spammers using these tactics.  Conservative estimates at the low end of the fake antivirus pricing suggest this could be a $1.2 billion industry for spammers and malware authors around the world.

As the criminals rake in these profits and computer users fall victim to such schemes every day there are calls for more to be done by Microsoft to protect their customers who are running Windows operating systems.  Microsoft has taken some recent steps such as offering a $250,000 reward for information that leads to the arrest and conviction of the Conficker authors.  More recently they released their free consumer malware protection called Microsoft Security Essentials.

However some commentators think that further steps are needed.  It is suggested that a whitelist of safe security products and vendors be created and included with Microsoft Windows so that it can detect fake antivirus software and prevent users from installing it.

This move would be welcome by many consumers and IT professionals but not necessarily by the security vendors themselves.  New vendors and products may be stalled by any certification process that would be required to be added to the whitelist.

Some existing vendors already have a frosty relationship with Microsoft as the software maker continually encroaches on their market territory with features such as Windows Firewall and Microsoft Security Essentials.  Any bottlenecks in the process would certainly bring claims of anti-competitiveness down on Microsoft.

Finally there are the costs.  Vendors will not incur additional costs in their software development and release process without passing that on to consumers.  Although the argument could be made that even an additional cost to consumers may be far less than what is currently being ripped off from victims by the spammers today.

At the very least, keeping those profits out of the hands of criminals would be a positive outcome.

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Fake Antivirus Software a $1.2 Billion Industry

This means many more consumers could end up with a variant of Conficker. You also could catch a worm that’s now tagging along for the ride.

This new worm, called Waledec, can open a back door to your computer to steal information or to allow an outsider to control it, security experts warn.”  Waledec’s goal is to make money by harnessing the power of an infected computer and millions of other computers to create a massive “bot network,” or “botnet,” to send out spam.

As recently as April 17, 2009 ZDNet reports the Waledec botnet is on the move again.  For waledec to be effective, cyber criminals are relying on the rotation of different “Subject” themes and the email user’s ignorance of its existence.   That is a hint to educate your email users ASAP.

Some typical Waledec spam email subjects being used:

• Can your love life be re-ignited?
• Are you sure in your partner’s faithfulness?
• Now, It’s possible to read other people’s SMS
• We will tech you to be the master of making love art
• Just type the phone number and read SMS
• Do you want to test your partner?
• Have more fun and pleasure in your intimate life
• Now, you can read any SMS messages from any mobile phones
• Keep a spy eye on your Girlfriend’s mobile
• What’s Your Hall of Shame
• Are you ready to know the truth?

The actual Waledec message body is something like “Get Your Free 30-Day Trial! Do you want to test your partner or just to read somebody’s SMS? This program is exactly what you need then! It’s so easy! You don’t need to install it at the mobile phone of your partner. Just download the program and you will able to read all SMS when you are online. Be aware of everything! This is an extremely new service!”.

Any other unknown conficker children you want to share with us?  Let us know with a comment.

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Meet Waledec, Conficker’s Child

          Dear Windows User,

On April 1st, 2009 the “Conficker” virus began infecting Microsoft Windows users extraordinarily quickly. Microsoft has been alerted by your Internet company that your system is showing signs of infection. In order to prevent further infection we advise checking your computer with antispyware software.

We are giving all effected Windows users with a free scanner to secure their computers. Please visit … etc., etc., etc.

The link in the spam leads to a website which attempts to entice users to download a … surprise, surprise … malicious file (Mal/FakeAV-AH, accoring to Sophos).

While pretty much everybody with a modicum of technical savvy will be able to spot that the message is a scam, it’s nonetheless somewhat more convincing than most and will probably hook a good number of people  (I suppose I should send my wife’s aged aunt a warning email before she ends up installing the darned thing and then calling me for help!).

Rogue security software and scareware is becoming increasingly common. According to Microsoft’s most recent Security Intelligence Report, “The prevalence of rogue security software has increased significantly over the past three periods.” And, as you would expect, the spam which attempts to trick users into downloading rogue software is becoming increasingly common too.

While your business inboxes are probably – and certainly should be – protected by a spam filter, you never know when one of these messages may manage to slip through the net - and this could, potentially, result in you being left with a mess to clean up (or, at the very least, time-consuming Help Desk calls from concerned users). Consequently, I’ll join Carl E. Reid on his The best email user is an educated email user soap box. To put it simply, there is no substitute for end user education. With threats evolving so rapidly, it’s almost invariable that something will, at some point, slip through your defences and, when that happens, it’s the actions of your end users that will determine the result.

In training users and raising their security awareness, you’ll not only be protecting your business computers, you’ll also be helping them to protect their home computers – and that’s good for everybody.

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Scareware Scammers Monetize Conficker